Skye Fund III issues letter regarding opposition of SomaLogic’s proposed merger

Skye Fund III, which together with its affiliates, owns approximately 3.4 million shares of SomaLogic (SLGC), issued an open letter to the Company’s shareholders regarding its opposition to the Company’s proposed merger with Standard BioTools Inc. (LAB) and its intention to vote AGAINST the Proposed Merger at the upcoming special meeting of shareholders scheduled for January 4, 2024. “After reviewing both the Company’s and Madryn Asset Management, LP’s proxy materials with respect to the proposed merger between the Company and Standard BioTools, as well as other publicly available information, we conclude that the Proposed Merger is antithetical to the interests of SomaLogic shareholders. For this reason, explained in further detail below, we intend to vote AGAINST the Proposed Merger at the upcoming special meeting of shareholders scheduled for January 4, 2023. Please note that we are not activist shareholders and have never engaged in any proxy solicitation – but feel strongly that it is our duty to speak up in this instance in the interest of the Company’s shareholders… the Proposed Merger – it grossly undervalues the potential of SomaLogic. An essential comparison is Olink Holding AB, a competitor that emerged a few years ago. Olink deployed technology originally developed by SomaLogic, and began introducing into European markets products similar to SomaLogic’s. While the two companies were neck-and-neck in financial results in 2021, Olink was better managed and executed better thereafter, resulting in its current revenue exceeding SomaLogic’s by more than 50%. In October of this year, Thermo Fisher Scientific Inc. announced its acquisition of Olink for $3 billion… However, it isn’t just SomaLogic’s revolutionary technology but the fact that SomaLogic has a strong, debt-free balance sheet with ample cash reserves of $450 million. We believe that SomaLogic’s cash reserves are more than sufficient to develop the market for its products and pursue major commercial success… Yet, inexplicably, the Proposed Merger values SomaLogic at approximately $500 million. With cash reserves of $450 million, this means SomaLogic’s revenue stream, technology, patent portfolio, customer base, industry reputation, commercial partnerships and knowledge are being valued at around $50 million. Considering that Olink sold for $3 billion, we believe that Standard BioTools’s offer is absurdly low, manifestly unfair, and unjustified in many ways. We also agree with Madryn that there are several other concerning issues with the Proposed Merger… Finally, it would be one matter if Standard BioTools was an exemplary company with a spotless balance sheet and great prospects, but Standard BioTools’ published results show flat revenue and net losses over eight years – no reason for optimism… For all of these reasons, Skye will be voting AGAINST the Proposed Merger. We believe that it offers no operational, strategic, or financial benefit to SomaLogic shareholders. Instead, we believe that the Board should focus on enhancing shareholder value, taking advantage of the ample opportunities SomaLogic currently has as a standalone company, and evaluating any corporate combinations with the interests of all of its shareholders foremost in mind.”